Correlation Between Dimet Public and Siamese Asset

Can any of the company-specific risk be diversified away by investing in both Dimet Public and Siamese Asset at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Dimet Public and Siamese Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Dimet Public and Siamese Asset Public, you can compare the effects of market volatilities on Dimet Public and Siamese Asset and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Dimet Public with a short position of Siamese Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dimet Public and Siamese Asset.

Diversification Opportunities for Dimet Public and Siamese Asset

0.55

Correlation Coefficient

Dimet Public  Siamese Asset

Very weak diversification

The 3 months correlation between Dimet and Siamese is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Dimet Public and Siamese Asset Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siamese Asset Public and Dimet Public is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Dimet Public are associated (or correlated) with Siamese Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siamese Asset Public has no effect on the direction of Dimet Public i.e., Dimet Public and Siamese Asset go up and down completely randomly.

Pair Corralation between Dimet Public and Siamese Asset

Assuming the 90 days trading horizon Dimet Public is expected to under-perform the Siamese Asset. In addition to that, Dimet Public is 3.17 times more volatile than Siamese Asset Public. It trades about -0.19 of its total potential returns per unit of risk. Siamese Asset Public is currently generating about -0.03 per unit of volatility. If you would invest  745.00  in Siamese Asset Public on September 15, 2024 and sell it today you would lose (5.00) from holding Siamese Asset Public or give up 0.67% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.24%
Values	Daily Returns

Dimet Public  vs.  Siamese Asset Public

Dimet Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dimet Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's fundamental drivers remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Siamese Asset Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Siamese Asset Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental drivers, Siamese Asset is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Dimet Public and Siamese Asset

The main advantage of trading using opposite Dimet Public and Siamese Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dimet Public position performs unexpectedly, Siamese Asset can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Siamese Asset will offset losses from the drop in Siamese Asset's long position.

The idea behind Dimet Public and Siamese Asset Public pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.